How to prepare for an IVA
If you're looking to enter into an IVA, then the concept of prior preparation really can't be stressed enough. After all, if your proposal gets rejected then you may have to look at other, more serious, consequences - such as bankruptcy.
In this article we take a look at how best to prepare for an IVA and what you need to do in order to get your proposal accepted.
- Firstly, you should put pen to paper and make a full list of your income and outgoings. If your IVA is going to be accepted, then you'll need to demonstrate that you can commit to it for the duration (usually 4 or 5 years) and that you have the financial means of doing so. During this process, it's advisable to get documentary evidence of your income and outgoings - so, for example, your recent payslips and details of other commitments, such as your council tax bill, utility bills and so on. The more information you can get, the better. Your chosen insolvency practitioner will be able to shift through these documents to determine what he or she might need so it's always better to have too much information, rather than too little!
- When taking your outgoings into account don't forget to include the more minor details, such as any travel expenses you might incur for going to and from work, your weekly shopping bill (based on the amount of people in your household that you might be responsible for), any child care fees, regular prescription charges and so on. Whilst these amounts might individually be quite small, together they add up and you might be surprised at what they equate to!
- Once you've got this information together then it's time to find your insolvency practitioner. Only regulated persons can administer and manage an IVA so you must ensure you have an authorised person to consult and deal with. If, for any reason, you're not sure about their ability to manage an IVA then don't be afraid to ask for their credentials. Any regulated professional won't hesitate to provide you with these - and after all, you're putting them in control of a very personal situation.
- Most initial consultations are free of charge so use this opportunity to ask as many questions as you feel necessary. Entering into an IVA can have certain implications so don't be afraid to explore these, according to your personal circumstances. If, for whatever reason, you don't feel that an IVA, or Scottish Trust Deed is the best solution for you, then don't be afraid to say so.
- Your insolvency practitioner will be responsible for drafting your proposal and submitting this to your creditors. Before it's submitted do make sure that you've seen a copy and are happy with it. If it gets rejected then you'll have to consider other options, such as bankruptcy, so don't underestimate the seriousness of the situation.
- If your proposal gets accepted, then your advisor will tell you how best to prepare for the creditors meeting. Whilst you don't have to attend this, it's usually advised that you do - so that you can answer any specific or concerns your creditors might have. After all, positive engagement is the way forward so it's good to embrace it!